Rachel Reeves will deliver the autumn budget on 26 November and has commissioned the Office for Budget Responsibility to prepare forecasts. The government faces pressure from rising borrowing costs, a sluggish growth outlook, higher inflation and welfare U-turns that could create a financing shortfall worth up to 40bn. The chancellor and the prime minister have committed not to raise taxes on working people through income tax, national insurance or VAT. Reeves has privately ruled out a formal wealth tax while exploring changes to capital gains tax, inheritance and property levies. Updated IMF forecasts could influence the budget tone.
The late November budget date will give Reeves time to prepare the ground for potential tax changes, raising the prospect of a high-stakes party conference season as Labour heads to Liverpool at the end of September. Reeves is understood to have been exploring several revenue-raising measures over the summer months amid concern that rising borrowing costs, a sluggish growth outlook, higher inflation and welfare U-turns could expose a shortfall in the government finances worth up to 40bn.
The chancellor and the prime minister have, however, committed to sticking to Labour's manifesto promise not to raise taxes on working people, including through income tax, national insurance and VAT. Reeves has come under pressure from leftwing Labour MPs and campaigners to consider introducing a wealth tax. While the chancellor has privately ruled out such a step, she has been exploring options for raising more money from wealthier taxpayers, including changes to capital gains tax, as well as inheritance and property levies.
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